DRE Public Talk: The Potential and Challenges of the Real Estate Funds Business!

Wednesday (26/03/2008) 12pm at LR423.

Mr Jonathan Yap gave a presentation on his views regarding the real estate business and gave specific insights on how Ascendas India Trust (a-iTrust) is run. I was priviliaged enough to be able to attend his talk. Below is a brief outline of what he covered.

Changing Market Dynamics
Investments into Asia have grown over the years. Surprisingly, this is actually due to the greying of the world's population. Currently, 11% of the world's population is >60 years old and that number is expected to hit 22% by 2050. This leads to retirement/pension money increasing and thus more money have been pumped into investments in developing economies, including Asia. With the globalisation of sources of funding, the accessibility of funds have gone from local to global with the interest in cross-border transactions increasing (think SWFs and foreign investors, etc). In Asia, REIT IPOs have generally been oversubscribed and currently, Asia REITs distribution yields have substantial spreads above 10-year government bonds. Just in Japan and Singapore alone, the REITs market cap have grown by almost 3 times to S$60 billion over 2005 to 2007.

Tapping on Real Estate Funds
There are several key advantages in tapping into REITs. First of all is the streamline operations of these funds. Real estate funds bring their niche expertise to the table, including development expertise, management expertise and local deal sourcing expertise. In addition, there is an add-on for capital market capabilities including fund structuring, capital raising and fund management.

The Ascendas Business Model
Ascendas employes a three-pringed strategy to provide maximum shareholder value. They are creating assets, enhancing asset value and finally unlocking the asset value. Ascendas manages about 7 funds (2 public and 5 private) including a-reit and a-iTrust as their public funds. The key investment highlights of a-iTrust include a high quality portfolio managed to international standards, strong growth potential, unique three-pronged acquisitions growth strategy, exposure to the booming Indian economy and Ascendas sponsorship and strong corporate governance.

a-iTrust closed up 2 cents to S$1.04 per share yesterday (Friday, 28/03/2008).

About the Speaker

Mr Jonathan Yap is Executive Vice President, Real Estate Funds Business, where he focuses on the formation of new private funds for Ascendas across the Asia region and developing business synergy across these funds.

Mr Yap is concurrently CEO of India Funds, overseeing Ascendas' India-focused funds business, including the Ascendas India Development Trust (private fund) and and the award-winning Ascendas India Trust (listed on SGX-ST).

About DRE Public Talks
These talks are organised by the Department of Real Estate and are opened to members of the public, students and staff of SDE. If you're interested in finding out how to attend these talks, drop me a message and I'll forward the registration links to you the next time there is a talk.